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CHRIS HAYES, MSNBC HOST, ALL IN WITH CHRIS HAYES: Good evening, live from
New York, I`m Chris Hayes.

After 16 days and at the precipice of the first default in U.S. history, we
can now report that at this hour both the Senate and the House have voted
to reopen the government and to lift the debt ceiling. It`s all over but
the crying.

The government will reopen tomorrow, and the United States will not
default. Just 50 minutes ago the House of Representatives passed by a vote
285-144 a Senate plan to fund the government through January 15th and lift
the debt ceiling until February 7th. The House even expedited the normal
process so it could get to the vote as quickly as possible. This, after 16
days, Republicans digging in over a wildly destructive and misguided
attempt to defund ObamaCare.

Just two hours before the Senate passed the bipartisan deal by an
overwhelming margin, 81-18, the OMB director says the bill has passed the
United States Senate and the House of Representatives, the president plans
to sign it tonight and employees should expect to return to work in the
morning.

Joining me is Congresswoman Karen Bass, Democrat from California.

And Congresswoman, how did you feel about casting a vote that, well, you
could have cast 16 days ago?

REP. KAREN BASS (D), CALIF.: Well, you know, I think this is just really
sad. I mean, I`m happy that it`s done and that people will be back to work
tomorrow. I tell you, I walk through the halls of Congress, and I felt bad
with all of the workers that were here even though they`re not being paid.

So they`ll be paid again. But this is really a sad chapter. We have to
really take a step back and reflect on this now. Why did this happen, what
was this for? We could have taken this vote three weeks ago. This was
completely unnecessary.

HAYES: Do you think that your colleagues on the Republican side of the
aisle, do you think they`ve learned anything?

Did you get a sense when you were in that chamber tonight as everyone was
voting and milling around, what was the atmosphere in there?

BASS: Well, the atmosphere was really, I think, a general sense of relief.
I mean, amongst the Democrats, people were very, very united. But we
didn`t take any pleasure in trying to pour salt in a wound. So there was
no demonstration of Joy or anything like that.

But you know, I think amongst a lot of my Republican colleagues, and I`ve
heard this over the last three weeks, many of them were embarrassed. Many
of them were conflicted.

Then some of them are just absolute zealots. So if your purpose of coming
to Washington was to reduce government, was to shut government down, if
that was your attitude when you came here, then I suppose what happened
over the last three weeks is consistent with your mission. And that`s sad.

HAYES: You have 144 Republicans that voted against this resolution. No
Democrats voted against it.

BASS: Right.

HAYES: The majority of the Republican caucus, after all of this, after 16
days of a shutdown, after getting the fight that they wanted, after being
beaten in the most humiliating and abject fashion imaginable, after all of
that, you still had a majority of the Republican caucus voting against
this.

BASS: Right. Exactly. And so, you know, I am hoping that as we all go
home and go back to our districts that my Republican colleagues take a
moment of reflection and really do some soul searching and say because you
know, in another three months, we`re going to be right back at this, right?
So are we going to take the country and then, frankly, the world through
this trauma again just to demonstrate something that makes no sense at all?
You remember when this started, this was about they didn`t want to see
health care for 30 million people who don`t have health care. That was
their objective. And then they quickly abandoned that, and they shifted.

Now, one of the things that was accomplished tonight is that we appointed
conferees to the Budget Committee. You know, Chris, Democrats have been
trying to do that since the beginning of this year. Now all of a sudden we
have a conference committee. And I`m glad that`s happening. But that`s
something that could have been done months ago.

HAYES: So what do you want to see out of these next few months as the
normal or quasi-normal budgetary process commences? A budgetary process
that`s been dysfunctional and broken since back in 2011? What do you want
to see come out of it?

BASS: Right. Well, what I hope is that my Republican colleagues will be
honest and recognize that even the number that we voted for today -- you
know, that wasn`t an easy vote for Democrats to take, even though we stood
united. That essentially kept -- keeps the sequester level funding in
place for another couple of months. And we know that our communities have
already been hurting because of that. Our economy could be roaring right
now if we weren`t burdened by the sequester. And so I`m hoping that my
colleagues will recognize that more resources are needed to get the economy
back going, to have jobs, to provide the services that the -- that the
government needs to provide. And I`m also hoping that some of my
colleagues actually learned a lesson. The government actually does
something, you know? I think some of my colleagues had to learn by the
government shutting down, and then they were shocked when when memorials
were cordoned off. Maybe they learned a little bit of civics. Maybe they
realized that government actually does provide worthy services that
everybody needs.

HAYES: That`s a great point, Congresswoman. Every day of the shutdown, it
seemed like Republican lawmakers had a new discovery of something --

BASS: Right.

HAYES: -- the government was doing that it would like it to keep doing.
Maybe that lesson carries forward. Things like nutrition for women and
infants, may be a good thing to fund. Congresswoman Karen Bass, thank you
so much.

Joining me now, Senator Bernie Sanders, independent from Vermont.

Senator Sanders, now that this nonsense has been dispatched with, what does
Washington need to do?

SEN. BERNIE SANDERS (I), VT.: Well, I think as the congressman just
suggested, Harry Reid and the president and Democrats won a major political
victory. But as she indicated, and quite correctly, the budget that we
passed until January 15th is a disastrous budget. It is going to hurt the
children. It`s going to hurt the hungry. It`s going to hurt the elderly.
It is not a good budget.

So Chris, I would hope that out of this whole exercise, this really
nightmarish exercise that the people of this country understand what right-
wing extremism is about, which, by the way, goes a lot further than just
trying to repeal ObamaCare and the Affordable Care Act.

It really is going to be -- it`s an effort to repeal virtually every major
piece of legislation passed in the last 80 years to protect the middle
class and working families and the sick.

Now, as a member of the Budget Committee, I look forward to the
negotiations which will take place.

And my view is that at a time when income and wealth inequality is growing
in leaps and bounds, when the middle class is disappearing, when real
unemployment is close to 14 percent while at the same time the wealthy and
large corporations are doing phenomenally well, what we need is a budget
which creates millions of jobs, a budget which addresses the crisis of low
wage work, a budget which rebuilds our crumbling infrastructure and a
budget, by the way, which says when one out of four corporations in America
does not pay a nickel in federal income taxes, that that has got to end.

HAYES: No, let me ask you this question because the way things are set up
right now is that the continuing resolution is going to expire right before
year two of sequestration kicks in. You mentioned it before and how
destructive and ruinous it will be. The number is too low, and I think you
and I agree on that.

But one interesting part about the second-year sequestration, is the
defense cuts start hitting much harder. The defense portion of the budget
starts taking a much bigger chunk of the cuts in year two. Does that give
Democrats leverage in these negotiations as it was intended to when
originally written into the Budget Control Act?

SANDERS: I think you`re exactly right. And I think it does give us
leverage. I happen to believe that in a time when the United States is
spending almost as much as the rest of the world combined on defense that
we can make significant cuts.

Needless to say, my Republican colleagues don`t agree with that. So it
will give us some leverage, I think, in making the case that we need
significant new revenues, that the wealthy and large corporations are going
to have to help us with deficit reduction and that we cannot simply balance
the budget on a collapsing middle class or people who are living in
poverty.

HAYES: Isn`t this just going to break down again, though, on taxes? We`ve
gone through 10 different iterations of budget negotiating committees. And
they`ve basically broken down every time. The only time they didn`t break
through was in the fiscal cliff deal that happened after the president`s
re-election. There is, it seems to me, an impasse over taxes here.

SANDERS: Well, I think you`re right. The Republicans have been very
adamant that despite the fact that the rich are getting richer, they feel
it is part of their Holy Grail not to ask billionaires or large
corporations to pay more in taxes.

But I think one of the reasons that the Democrats won this struggle right
now, the political struggle, is not only the strength of Majority Leader
Reid and the president beginning to really stand up forcefully, but because
the American people were involved in this issue.

And what the American people were saying is you don`t sabotage the United
States government and shut it down in order to get your way.

I think if we can rally the American people so that they are saying, no,
we`re not going to balance the budget on people who are already hurting, we
are going to ask upper income people and corporations to start paying their
fair share of taxes, do I think we can do that? I do if we do our job
well.

And Congressman, were you wishing you were in the House gallery this
evening?

BARNEY FRANK (D), FORMER REP FROM MASSACHUSETTS: Oh, not in the gallery.
I was wishing I was on the floor. I was struck by one side of the
Republican`s total unhappiness was on an issue like this, they didn`t use
the debate time.

HAYES: So true.

FRANK: The Democrats -- first of all, both sides gave it up. But
ordinarily people would be beating their breasts. And by the way, it is
interesting the way the Republicans with all that talk of openness managed
this: 61 percent or 62 percent of Republicans voted against the bill.
There were four Republican speakers and three were for the bill. They
wouldn`t let their own people speak again it.

No, I would very much like to have been in this debate because I think
Bernie and Karen are both -- made good points. This is a transfer us (ph).
And people say don`t gloat. No, I don`t want to gloat. I want to make the
point.

This was not an accident. This is the logical extension of the ideology
that has taken over the whole Republican Party. And the American people
repudiated it. The American people said no, we don`t want to shut the
government down. We believe government has an important role to play in
our lives. We don`t want this kind of hostage-taking.

They were not in favor of undoing the health care bill in this manner. And
I think we need to press that point. And I don`t have great hopes for this
negotiation. What I have great hopes for is the 2014 election.

HAYES: Yes.

FRANK: There`s a very stark difference between the parties in terms of
responsibility, in terms of willingness to support a civil society. Let`s
take that to the people.

HAYES: Here`s what was so striking to me about the Republican caucus on
this in the House. All of the reporting today from basically every outlet
said essentially this, that Boehner has strengthened his hand with the
caucus, that he`s in better shape now than he was that the conservatives
who essentially dictated the strategy that Boehner followed, they`re --
even though they lost in -- they completely lost, they got nothing, they
somehow are gratified by the experience of it.

And I have to say, I find that more frustrating and infuriating than the
converse, which is that they were angry and felt unfulfilled, because it
looks to me like this was essentially a temper tantrum for two weeks. They
needed get it out of their system.

FRANK: Well, I -- that may be a little optimistic, Chris, because you
know, one of the causes that I`ve been pushing is to legalize the smoking
of marijuana by adults instead of locking them up. And apparently that
may be more widespread among the Republican House members than I thought
because that`s the only explanation I can think for this particular extreme
mellowness that they are --

(LAUGHTER)

HAYES: It is remarkable how -- how mellow they are in defeat.

FRANK: They didn`t just lose strategically and tactically. They lost
substantively.

First of all, they played this ridiculous game of shutting down the
government, and then yelling at civil servants.

One of the things I find most despicable about these people is the bullying
of other public officials, going after staff members who work so hard for
inadequate pay, members of the congressional staff, yelling at these
employees of the park service.

These people vote to shut the government down, and then they yell at other
people because the government is shut down. And it`s extraordinary.

The other, of course, great hypocrisy is -- I`ve said this many times --
John Boehner voted for much more of the debt than I did.

HAYES: Yes.

FRANK: I didn`t vote for the Iraq war. He did. That`s a trillion or so
dollars. I didn`t vote for the Bush tax cuts. These people incurred this
debt. And then they act as if paying it is a favor they`re being asked to
do for those of us who try to have less debt.

HAYES: And then Paul Ryan this evening was one of the 144 no votes on the
Republican side.

FRANK: Well, that`s very interesting. I think that`s -- I guess that`s a
declaration by Ryan that he`s going to try and win the nomination.

But I don`t see how anybody who was one of that 143 people voting for the
destruction of our economy -- remember, if they had prevailed and that had
lost, we would have defaulted on the debt, there would have been terrible
consequences. Not the destruction but serious damage. So I don`t see how
he can be running -- and I think Paul Ryan is -- and a lot of the
Republicans, I`m going to repeat myself.

I think they -- you know, people talk about the things I`ve learned in
school. There`s one thing that the Republicans apparently didn`t learn in
school and particularly that important course, driver`s education. If
you`re going to set out driving on a very difficult, unknown road, don`t
put your car in cruise control.

HAYES: Former Congressman Barney Frank. Thank you so much for your time.

Coming up --

(BEGIN VIDEO CLIP)

REP. HAL ROGERS (R), KY.: The House must realize it is just one half of
1/3 of this government. And that no laws can be made without the consent
of the Senate and the president.

(END VIDEO CLIP)

HAYES: That little civics lesson came from Congressman Hal Rogers of
Kentucky, a Republican not a Democrat, but a real talk for his fellow
caucus members. But will they listen? The future of the GOP and dare I
say the country is at stake. Stay with us.

HAYES: Some big election news tonight. With a vacant U.S. Senate seat up
for grabs in New Jersey, the Associated Press has called the race for
Democrat Cory Booker, the mayor of Newark and a rising star in the
Democratic Party.

He defeated conservative Republican Steve Lonegan for the seat held by the
late and dearly missed Frank Lautenberg. Booker, who is known for frequent
communication with constituents on Twitter, offered his expression of
gratitude to his 1.4 million followers. "Thank you so much, New Jersey,
I`m proud to be your senator-elect."

(COMMERCIAL BREAK)

REP. RAUL LABRADOR (R), IDAHO: I can only speak for myself, but I`ve
actually been really proud of Speaker Boehner the last 2.5 weeks. I don`t
think that he should be ashamed of anything that he has done. It`s been
Republicans here who apparently always want to fight, but they want to
fight the next fight that have given Speaker Boehner the inability to be
successful in this fight.

(END VIDEO CLIP)

HAYES: That was Republican Congressman Raul Labrador of Idaho praising
House Speaker John Boehner today. Back in January when Boehner was up for
a second term as Speaker, Congressman Labrador didn`t bother to vote, one
of the three Republicans who didn`t bother to vote as well as nine more
Republicans who voted against Boehner.

Congressman Labrador has been a frequent critic of Speaker Boehner. The
question today coming out of the debacle that Boehner undertook at the
behest of the Far Right fringe of his party is, what is next for this
Republican caucus?

Are you surprised, Joy, by all the reports today which is oh, are you --
all these House Republicans who made Boehner do this, right? It failed
miserably. It was a humiliation and all of them today are being like, that
is my boy. John Boehner? Are you kidding me? I love that dude.

I go what is the deal?

JOY REID, MSNBC CONTRIBUTOR: It is the most ironic outcome of this whole
debacle is the increase in popularity of Boehner among the base. This was
sort of his bath in acid. He had to prove that he would do anything, climb
any hill, destroy the country at the behest of the Tea Party.

RYAN GRIM, MSNBC CONTRIBUTOR: Well, I think the context for this is -- and
as I reported earlier, everybody around Boehner, and that`s beginning to
include most of his conference, believes that he`s going to retire at the
end of 2014.

So you have to -- you have to think, OK, what are we going to gain if we
do, you know, stage some type of coup and overthrow him. You know, chances
are pretty good that you might actually fail in your coup attempt. And
then you look like a clown.

Or you overthrow the Speaker by now we`re in the middle of an election year
by the time they would be able to get this together, and then they lose the
Speakership itself. So they don`t even get then to be led by, you know,
Hensarling or whoever they install --

(CROSSTALK)

HAYES: If that`s -- if those are the structural realities that underpin
Boehner`s strength, right, then why the heck did he have to put the whole
country through 16 days of shutdown?

If he`s essentially untouchable for the reasons you indicate, then why do
we have to -- why did he have to take us all through this madness, this
very destructive madness?

GRIM: Well, I don`t think he actually did.

HAYES: Right. But that is the -- that is the key point. Say that again
because this whole story about, oh, John Boehner, he had to do this to woo
his caucus, he didn`t. This was John Boehner made a choice with really bad
consequences for the people of America. Let`s just highlight that.

GRIM: Yes. None of this -- none of this had to happen. We all knew from
the very beginning, and we -- and we said it, we said the way this is going
to end --

HAYES: Yes.

GRIM: We don`t know when, but we know how. John Boehner will put a bill
on the floor that is to the satisfaction of Reid and Obama. It will pass
with Democrats and a few Republicans because how this system works. The
House doesn`t just make laws on its own.

HAYES: Yes.

GRIM: This wasn`t a mystery to anybody. The question was when he -- you
know, he decided that he was going to run it up until the last minute. A
lot of people suffered, you know, scientific research was hampered, you
know, Centers for Disease Control was hurt. You know -- infants, women,
children, you know, went without food for this, 800,000 people out of work.
And it was all avoidable.

REID: Well, I mean, the kind way to look at, you know, the sort of kindest
cut for Boehner, the kindest way to look at it for him, is that he was
trying to prove a point.

REID: To these members that don`t understand government, that don`t take
the time to really understand how Congress works, how the country works,
how the debt limit works.

They don`t understand anything, they don`t know anything, to quote the book
"Game Change," about Sarah Palin. They don`t know anything.

So maybe this -- he may think this is the only way to show them that the
strategy won`t work. Well, that won`t work because they still think it
could have worked if he just stuck it out. So if that`s the way you look
at it, that is also a failure.

HAYES: One of the things you`re dealing with -- the other thing I think is
true here, and it`s stunning for me to say this, but I had Representative
Jack Kingston on at 8 o`clock. And he said this thing about how we need to
show our beliefs. Essentially this is like expressive, this is like
college freshman year dorm room politics, in which you need to just express
yourself. You need to let people know how truly you believe something.

REID: Yes.

HAYES: So we all pay the cost of this -- instead of getting a drug circle
or big puppets, whatever they need to do to let everyone know how they
really feel, I think that`s part of it. They needed to show people how
serious and committed they are.

REID: Right. There`s a catharsis need. And I think to understand the
modern Republican Party, you have to understand -- and we talked about this
before -- is the anger and rage and disappointment that the base feels with
the Republican Party.

HAYES: Yes

REID: That their own party is not standing up for what they believe is
true conservatism. I think there`s this need among the base to have
elected Republicans really show them, really demonstrate that they really
are -- that they really are at least respectful of their conservative
beliefs and demonstrate it with real acts.

HAYES: Ryan, what does that mean for this conference going forward?

GRIM: Well, the question is whether or not this counts as that
demonstration. You know, they say, you know, if you show a gun in act one,
you know, you have to use it in act two.

So hopefully for the country, this counts as them using -- using their gun.
You know, they shut the government down.

You know, hopefully that doesn`t mean they have to go into default. Which
-- which they`ll be much less likely to do next time because critical
filing deadlines for primaries will have passed by the next time we get to
the debt ceiling. I think you`ll find people much less interested in
demagoguing the debt ceiling when they`re already cruising to re-election.

HAYES: I think the actual checkoff quote is if you show a gun in act one,
you have to shoot a park ranger in the foot by the end of the play. And
also what about the Benghazi cover-up? MSNBC contributor Ryan Grim, thank
you. Joy is going to stay with us.

Coming up next, the government shutdown and near debt ceiling disaster in
retrospect. Watch and feel good reflecting on how Republicans lost in the
end. Stay with us.

(COMMERCIAL BREAK)

HAYES: Breaking news. There`s lots of actual work Congress can do to make
things better in the country rather than worse. We`ll talk about what that
strange alternate universe might look like coming up.

But first tonight, we watched almost total capitulation by Republicans.
The hostages have been freed, no ransom has been paid. A resounding
victory for the president. A dramatic reversal of fortunes for Republicans
from just two short years ago. To understand the magnitude of what just
happened today, you have to go back to the summer of 2011.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Good morning, crisis averted. President Obama and
congressional leaders agree on a plan to raise the nation`s debt ceiling,
but not everyone on Capitol Hill is happy.

UNIDENTIFIED FEMALE: The President of the United States saying that the
leaders of both chambers and both houses have agreed to a deal to avoid the
first-ever default in the history of the United States.

UNIDENTIFIED MALE: A modest victory for the forces of compromise and
centrism.

HAYES (voice-over): Two years ago faced with a similar debt ceiling
hostage situation, the president cut a deal with Republicans.

JOHN BOEHNER, SPEAKER OF THE HOUSE: You know, I got 98 percent of what I
wanted. I`m pretty happy.

HAYES (voice-over): In exchange for raising the nation`s debt limit,
Democrats agreed to sharp cuts in government spending. It was a huge
victory for Republican extortion.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I want to thank the American
people. It`s been your voices that have compelled Washington to act in the
final days.

JON STEWART, HOST, "THE DAILY SHOW": Let me stop you right there. You`re
not pinning this turd on us.

HAYES (voice-over): This week, "The New York Times" reports that in the
summer of 2011 after that historic compromise, the president pulled
together his inner circle of senior advisers and told them, quote, "I`m not
going through this again. It`s bad for democracy. It`s bad for the
presidency."

For the better part of two years, the president has repeated in public what
he told his staff in private --

OBAMA: I`ve been very clear, we`re not going to negotiate around the debt
ceiling.

We`re not going to negotiate under the threat of further harm to our
economy and middle-class families.

You don`t negotiate by putting a gun to the other person`s head.

HAYES (voice-over): And today what appears to be a resounding Republican
defeat seems like it was inevitable. But it wasn`t. Yes, today`s victory
for Democrats was due in part to Magruder (ph)-like planning on the part of
Republicans.

UNIDENTIFIED FEMALE: For political purposes, President Obama and Harry
Reid wanted the government to shut down --

HAYES (voice-over): The president and Democrats never took the bait.

NANCY PELOSI, HOUSE MINORITY LEADER: Let us reject this because this is --
you know, they took hostages by shutting down the government. And now
they`re releasing one hostage at a time.

SEN. HARRY REID, MAJORITY LEADER: What right did they have to pick and
choose what part of government`s going to be funded?

OBAMA: We don`t get to select which programs we implement or not.

HAYES (voice-over): As Democrats refused to cave, Republicans were banking
on winning the media war.

UNIDENTIFIED MALE: I think -- I think -- I know we don`t want to be here,
but we`re going to win this, I think.

HAYES (voice-over): But in the end, the polling told a different story.
The latest NBC News poll found the Republican Party has their lowest
favorable numbers in the history of the poll with the party in disarray,
Republicans rushed to cast blame.

UNIDENTIFIED MALE: This president is determined to destroy the Republican
Party.

HAYES (voice-over): Today, Democrats defended the democratic principle.
One party in one house of Congress does not get to threaten destruction in
order to dictate terms of policy they lost in a national election.

One can only hope that a chastened Republican Party has learned their
lesson, as well.

BOEHNER: We fought the good fight. We did everything we could to get them
to the table and to negotiate. They just kept saying no. No, no, no.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

HAYES: This was the cover of the "Drudge Report" this afternoon. House
Speaker John Boehner wiping away tears with a caption that read, "Mercy!
ReidMcConnell reach deal."

But up there in the left-hand corner, an image seems to warn "Drudge"
readers of immigrant families sprinting across the southern border right
there on the computer screen with a line saying, "Obama Vows Immigration
Push."

And that is based off an interview President Obama gave yesterday which he
said that once the final chapter of the shutdown crisis was over, he would
pivot next to immigration reform.

Telling Univision in Los Angeles, quote, "The day after, I`m going to be
pushing to say call a vote on immigration reform. And if I have to join
with other advocates to continue to speak out on that and keep pushing, I`m
going to do so. Now is the time to do it."

The looming debt ceiling and continuing resolution deadlines have sucked
all of the oxygen out of Washington, not just for the last couple of weeks
during the shutdown, but more or less for the last couple of months, and
now the real work begins. And not just on comprehensive immigration
reform, which has already had a pretty strong bipartisan vote in the
Senate, but on the budget.

And knowing the fact that both chambers will have to cobble together their
various budget proposals and hammer out an agreed-upon long-term plan
before the December 13th deadline for a budget conference committee.

Will the budget issues be easier to solve once the chambers return to
regular order, or can we expect another budget battle well into the
holidays?

Still with me is Joy Reid, joining me now is Congresswoman Barbara Lee,
Democrat from California, and Congressman Jim McDermott, Democrat from
Washington.

And Congresswoman Lee, I`ll begin with you and ask you this question, we
have seen the so-called Hastert Rule which is essentially about as real as
unicorns violated on every monumental piece of legislation, every
accomplishment that`s happened has passed without a majority of Republicans
voting for it.

That`s the fiscal cliff deal, that`s Sandy aid. That is now this deal.

REP. BARBARA LEE (D), CALIF.: Well, certainly Democrats are going to work
very hard -- as the president indicated he will work -- to try to get this
comprehensive immigration bill to the floor. But we know that there are
many Republican Tea Party members who are here who came here, really quite
frankly, to dismantle the government, and who came here to destroy the
government.

So I don`t expect many votes from them. But there are plenty of moderate
Republicans who I think really understand the value of and the necessity
and the requirement that we pass comprehensive immigration reform right
away. And believe you me, all of us are going to work to make sure that
happens.

HAYES: Congressman McDermott, here`s a whip question you may or may not be
able to answer. I mean, if this was brought tomorrow morning -- if this --
John Boehner just had a conversion experience tonight after this whole
debacle that he engineered and said, you know what, screw it, let`s just
see what passes in this fricking body and he brings up the Senate
comprehensive immigration reform bill, does it have 218 votes to pass?

REP. JIM MCDERMOTT (D), WASH.: It`s pretty hard to deal with your
hypothetical because John Boehner doesn`t have the nerve to bring it up.
He`s already wondering if he`s still the Speaker of the House.

When he goes into that conference next week, it`s going to be a real
question whether he`s still there. If he brought the bill up, he would
have a large number of the Democrats that would vote for it. I don`t know
what the Republican split is.

Today, the Republican split was 84 votes for the bill, and 144 against it.
They are deeply split on the other side and very negatively split. So I
don`t know that we could pass an immigration bill even with -- unless we
put up every single one of our votes.

HAYES: The only time there has been anything passed, it`s been with some
kind of deadline or crisis impending. The question is, is there any hope
of some regular order producing anything useful out of the House without
some kind of impending deadline?

LEE: Yes, Chris, these are manufactured crises actually. They`re
manufactured by the radical Tea Party Republicans. Hopefully the public
really has sent a message to them that they want to see a functioning
government. They want to see people getting back to work. They want to
see jobs created in our country. They want to see us get back to what we
call regular order.

HAYES: Congresswoman, you just said the magic word, "jobs." which has been
essentially absent, particularly during this shutdown period.

Joy, I want you to talk to me about what the vision for a budget is, and if
there`s any relief for the people out of work who are essentially
completely forgotten by much of Washington, particularly the Republicans in
Congress, right after we take this break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PELOSI: Tonight the unnecessary shutdown America has been enduring for 16
days comes to an end.

Thank you, Speaker Boehner, for finally allowing a majority of House
members to reopen government and avoid a default that would have clearly
wreaked havoc on our economic credibility and the stability of our country.

It is equally clear that the shutdown has already shaken some pillars of
our economic security and growth. It has jeopardized our credit rating,
slowed our GDP growth by 0.6 percent. It has eroded consumer and investor
confidence in our economy while taking $24 billion out of our economy.

My colleagues, do you think that your recklessness was worth $24 billion to
our economy?

HAYES: Nancy Pelosi earlier tonight on the House floor just before that
vote that passed the House to reopen the government. If you`re watching
this and you`re a furloughed worker, you should know OMB has sent out an
email to your BlackBerry, which you were legally not allowed to check
during the shutdown, saying be back at work tomorrow, as the president is
expected to sign the bill tonight.

And, Joy, do you think there`s any chance of any kind of regular order?

The idea is the president said we`ve got to get out of this habit of
governing through crisis. We had this macroeconomic advisers report
yesterday that said this series of crises and austerity have combined to
cost us about a millions jobs, hundreds of billions lost in economic
activity. But all we`ve done tonight is once again passed a temporary
continuing resolution.

REID: Right. I mean -- and I guess I would answer the question by posing
another. What has changed about the incentives to conservative Republicans
in the House?

Nothing. Nothing has changed at all. They still have what they believe
are their core principles that they feel, OK, we lost this fight, but only
because we didn`t fight hard enough. What they`re hearing from the media
elites on the Far Right is "fight even harder." I don`t see what`s changed
--

HAYES: "The Washington Journal" said it`s time to wrap this up.

REID: They don`t read the papers.

HAYES: Well, they do, though. Or how about this -- their donors read the
paper, right?

REID: Right.

HAYES: And Congresswoman Lee and Congressman McDermott, do you think
anything has changed?

Does the political defeat here for the Republican change anything about the
way that this budget conference goes, about the way they attack the next
deadline?

MCDERMOTT: We will see. There`s nothing that indicates to me they learned
much of a lesson from this.

The fact is that everything the president`s proposed for five years they
have opposed if it had to do with jobs. And there`s nothing that says it`s
going to be any different. We just moved the debate about six or eight
weeks, 10 weeks down the road. And we`re going to be right back in the
same thing after the first of the year.

HAYES: Well, that`s depressing.

LEE: One thing, though, Jim, that has changed and that is the public.
Public opinion and the people in our country really are beginning to see
who these very radical right-wing extreme Republican Party members are.
And I think the public is going to demand that we come back to some
semblance of order. And who -- I don`t think the public wants to see this
take place ever again.

HAYES: Here`s the issue with that. The public, there was a very high
level of public attention to this shutdown because it was an extraordinary
event. I think there`s a tremendous amount of widespread public disgust
and frustration, and the polling shows it was largely directed at the
culprits, the Republican Party and the House Republicans in particular.

But in the absence of something extraordinary, the normal business of
Republican obstruction, what confidence can there be that that will capture
the public imagination?

MCDERMOTT: There`s none. The fact is that since we`ve had this debate on
the continuing resolution, nobody is talking about the implementation of
the Affordable Care Act.

HAYES: Right.

MCDERMOTT: Now the right wing is already filing lawsuits against it all
across the country. I have a pile of lawsuits an inch and a half thick on
my desk, of places where they`re trying to dismantle it. They have not
given up the fight that they had. And nothing has changed. It`s just
what`s on TV right now, they respond to. It will drop off the TV, and
we`ll see what happens.

HAYES: But Congressman, Joy brings up a good point, which is one of the
grand ironies of this whole last two weeks is that the ostensible reason
they were fighting ObamaCare, to defund ObamaCare, it overshadowed the
rollout of ObamaCare which has not been smooth at all, in the least.

Now that that attention goes back to it, how do you think that plays out
politically?

REID: Well, I think it`s given absolutely the Affordable Care Act a second
chance to make a first impression. Now that (inaudible) the news cycle,
it`s given the HHS Department to get it right and get it going. But the
other fact on the ground is that they didn`t stop it from happening. So
people are already beginning to sign up.

Once people actually get through the process and sign up, they going to
come to expect they`re going to have in January. And taking it away -- and
that`s what even a lot of people on the Right said, very overtly, was that
you have to stop this from taking root, because people will come to expect
it. That`s where there were afraid of, and they couldn`t stop it. And
they can`t.

HAYES: Congresswoman?

LEE: Yes. And you know what, though? People, I think, really understand
now that the reason for the shutdown and the reason that we almost
defaulted on our debt was because the Republican extremists, the Tea Party
members, wanted to deny health care to millions of Americans.

People want health care. They deserve health care. They need health care,
and once these kinks are taking care of -- and any big program, of course
when they get started, there are going to be difficulties. Once these
difficulties are overcome, then people will say, wait just a minute. I
could have been denied the health care that I have now.

What in the world was this all about?

And I do believe once this sets in and people start receiving the type of
health care they deserve, they will begin to look at what has just happened
and say this was just downright wrong. It was morally wrong, and it was
economically wrong, and they`re not going to allow this to happen anymore.

MCDERMOTT: I agree with Barbara. We are going to have, on the West Coast,
California, Oregon and Washington are having thousands of people enroll
already. The rest of the country is going to start saying, why can`t we
get what they have in California and Washington because they will figure
out that they have been denied or not told the truth in their states. And
there is going to be an awful lot of turmoil in the Congress over this
whole issue.

HAYES: And New York State has had a fairly successful one. In fact, some
of the state-based exchanges have had more success than the federal one.
And part of the issue is of course that the federal government ends up
having to handle about 36 states, if I`m not mistaken, including
Washington, D.C., which is more --

LEE: But you know, people are beginning, Chris, to understand that it`s
the law of the land. The Supreme Court has upheld its constitutionality.
And we need to move on.

HAYES: Yes, but it`s the law of the land, Congresswoman, but I would
respectfully say that if it does not work for people, that will not be much
solace. I think that it really does matter tremendously to both the
political fortunes of this president, the political fortunes of the
Democratic Party and the substantive good of the American people that this
stuff gets figured out and starts working smoothly in the next few months.

LEE: But I am confident that this administration is going to make that
happen. And those of us in Congress who want to see millions of Americans
with health insurance will make sure that it happens.

(CROSSTALK)

MCDERMOTT: (Inaudible) on the Ways and Means Committee, that is
responsible, the health subcommittee, we have not had a hearing in two
months to fix anything about the Affordable Care Act.

Coming up, I have something to say to the people who got us into this mess.
Fair warning, it will be harsh.

(COMMERCIAL BREAK)

(BEGIN AUDIO CLIP)

BOEHNER: We`ve been locked in a fight over here trying to bring government
down to size, trying to do our best to stop ObamaCare. We fought the good
fight, we just didn`t win.

(END AUDIO CLIP)

HAYES: The government is set to reopen and default averted 16 days into
this crisis. With none of Speaker Boehner`s original demands in that deal,
it is now tonight more obvious than ever that John Boehner could have done
this and gotten the exact same thing 16 days ago, which means the shutdown
was for nothing.

Republicans have nothing to show for it; Republicans did nothing for the
country and did nothing to roll back ObamaCare, their stated goal, though
they did manage to obscure the problems with this rollout. And here is the
destruction and the havoc Republicans wreaked. The shutdown caused $160
million a day in lost economic output, according to IHS Market Research.
That is $2,560,000,000 over 16 days. And when all factors are considered,
$24 billion was lost to the U.S. economy, according to Standard and Poor`s.
At least 0.6 percent was taken off of our annualized fourth quarter growth.

The party that is obsessed with the deficit and the wise and judicious use
of our dear money wasted millions, possibly billions of taxpayer dollars,
and for no reason. That is money that is gone. We will never get that
money back. National parks closed, their employees furloughed. In fact,
nearly 800,000 government workers nationwide were without a paycheck when
the shutdown began.

Cancer treatments put on hold: the National Institutes of Health generally
not accepting new patients into clinical research, are normally about 200
patients per week. Assistance for poor women and children disrupted.
North Carolina`s Work First and TANF (ph) programs serving 20,000 and
70,000 poor people respectively, both affected; 3,200 needy families in
Arizona were cut off until the governor decided to allocate state funds
temporarily.

Head Start was shut down until a donor offered $10 million to keep it
running through the month. The Centers for Disease Control closed eight of
10 global disease detection centers, routine safety inspections were
suspended by the Food and Drug Administration. The Nuclear Regulatory
Commission was shut down, retaining onsite inspectors, it said. The
Environmental Protection Agency halted reviews of new pesticides and
industrial chemicals and compliance with pollution standards, auto recalls
and investigations of safety defects were put on hold by the National
Highway Traffic Safety Administration. Hundreds of FAA air traffic
controllers worked without pay. And some were concerned with passenger
safety.

Because we came to close to default, U.S. Treasury bills were affected.
U.S. now offering higher interest rates on short-term debt to attract
investors. In other words, it`s getting more expensive for the U.S. to
borrow money, which of course also only adds to the debt problem
Republicans say they care so much about.

This man-made, John Boehner-made, Republican Party-made catastrophe also
took everyone`s attention away from the most pressing challenges of our
time, bringing 11 million undocumented workers into the system, meeting the
challenge of climate change, finding a way to turn a slow recovery that has
not been working for 90 percent of Americans into one that does, a recovery
by the way made worse by this stunt. Instead, the World War II Memorial
histrionics or dressing up in an NIH lab coat or taking one of their
worthless partial C.R. votes, what Republicans should have done is just
create a bonfire on the Capitol lawn and take some symbol of all the time,
energy and emotional lives of the people affected, their labor, their
actual resources, just pile it up on the South Lawn of the Capitol and
light it on fire for the entire nation to watch.

Sheer and total destructiveness, purposeless destruction. They owe
everyone an apology because that is what this all amounted to.

That`s it for this special edition of ALL IN. Our live coverage continues
now with "THE RACHEL MADDOW SHOW."

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END

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